The UK will write off its share of debts owed by the world's poorest countries, Gordon Brown is set to announce on Sunday.

The Chancellor will encourage other rich nations to do the same in a bid to lift the burden of debt repayments from Third World nations.

The UK holds about 10% of the total debt owed to the World Bank and other development banks.

Mr Brown's initiative has been welcomed by aid agencies.

Pressure

His move will put pressure on other major creditors such as the US, Japan and Germany to follow suit at meetings of the IMF and World Bank next week.

France and Canada are already understood to be planning similar announcements.

Mr Brown currently holds the chair of the IMF and has long promoted policies to solve the international debt crisis, including 100% relief on bilateral debt owed directly to the UK by heavily-indebted countries.

His announcement will come in a speech at St Bartholomew's Church in Brighton as part of the Vote For Trade Justice event ahead of the Labour Party conference.

Brown plans to write-off debt

Treasury sources confirmed that Mr Brown will call for the international community to provide up to 100% relief of multilateral debt.

And he will argue that rich countries should provide extra cash to fund the relief rather than paying for it from existing aid budgets or running down support for international institutions.

Campaigners believe his initiative, for which £100m a year has been put aside, could mark a turning point in efforts to lift the burden of debt on the developing world.

It would free Third World governments to devote a higher proportion of their budgets to health, education and economic development.